As other loan origination systems struggle to be all things to all people, Fiserv thinks that it has truly achieved that goal with its Common Origination Platform (COP). The system provides an end-to-end LOS solution that goes well beyond being just a document preparation system. The software is highly configurable and is built with open architecture that delivers efficiencies across business channels. COP supports the origination of mortgage, consumer, home equity and business loans on a single platform. With this solution, lenders can establish their own business standards, including operating procedures, conditions and limits, automating virtually every transaction and promoting consist processes. Lenders also can set compliance requirements and perform regulatory updates en masse without duplicating tasks or keystrokes, which frees up valuable time and resources. How does this compare with other LOS systems? And what does COP have in store for the future to remain cutting edge?Mark Deese, Product Manager for Lending Solutions, Fiserv, answered these and other pressing questions.

Q: How has the LOS space changed over the past five years?

MARK DEESE: The LOS has changed in a lot of different ways. Competition is disappearing due to some vendors closing up shop and others getting acquired. Regulatory items are also taking over as the No. 1 priority. Road maps, regardless of who you are as a vendor, have drastically changed. You have a little less sizzle, in a sense, and more emphasis on regulatory support. I’ve seen is a lot of User Interface changes. The idea that custom or homegrown systems are better is becoming an idea of the past, as well. A lot has changed in the LOS space.

Q: What do you expect the LOS space to look like five years from now?

MARK DEESE: All of the vendors have streamlined. Everyone in the industry is kind of on the same page with what the LOS can do. The look and feel might be a little different, however. The differentiators between LOS players is going to be very different in five years. As I see it the ability to offer a top-quality customer experience is going to set the best LOS players apart. If you think about it there aren’t many different ways to process a loan, and with new regulation, that’s forcing more best practices to the forefront. So, the lender that can offer the customer a better experience and better educate the customer will be the successful lenders. The best technology players will support lenders in this movement.

Q: On a separate, but related note, there have been a lot of LOS mergers and acquisitions. Do you expect that to continue and how do you think it’s impacting the space?

MARK DEESE: My first thought would be to say that mergers and acquisitions will continue, but then I take a step back and think about the lenders themselves. In my view, there were a lot of mergers going on in 2008 and 2009, but that has started to slow down, especially when it comes to the bigger names. So, I would anticipate that mergers and acquisitions might slow down. I don’t think it’ll ever stop, but you won’t see it in the news every couple of weeks.

Q: How critical is keeping compliant and having a good forms /doc strategy to providing a world-class solution these days?

MARK DEESE: I was at a conference recently, and someone was talking about regulations in 2020. Part of me thought that was so far away, but things are moving so fast. The LOS won’t be around in five years if they don’t keep up with compliance and regulations and having that proper document provider in place. It’s great to have the sizzle, the special enhancement, but if you don’t have the underlying compliance and rules in place to manage that system and manage your loans, as great as it looks, if there’s not an engine under the hood of that car, in a sense, you’re not going anywhere.

Q: Rules changes are happening at a staggering pace. How does COP stay ahead of these changes?

MARK DEESE: When we were at MBA Annual last year we were hearing that some vendors were saying that they would not have a solution for their clients ready in the next 30 days to deal with the January changes. That was a scary thought to me. For us, compliance is always at the top of our roadmap. We are always ready. Not only is compliance always going to be at the top of our roadmap, we’ve also started discovery function to look at future regulations. Complying with a new rule can happen in several different ways, but we at Fiserv want it to happen just one way. We want to incorporate best practices, not one-off practices. We always have a plan well in advance and we communicate that to our clients.

Q: What is COP’s biggest differentiator as you see it?

MARK DEESE: COP is one system that can handle a variety of loan types, that’s our value proposition. We offer one system that handles all of lending. When there’s a mortgage update to COP, that update goes across all of a lender’s channels. They don’t have to wait for the home equity update. Everything is in one system of record.

Q: Looking ahead, what technology does every LOS have to incorporate into the core system to stand out?

MARK DEESE: We are always looking to provide the best customer experience. We want to help our lender clients retain their current customer base by offering them other products that they might need. At the same time, we want to provide our lenders the right tools to expand their customer base, as well. You might have gotten a mortgage one place, but a car loan somewhere else. Why? Your mortgage lender should be able to offer you that car loan and it should be a really simple process. As a result, the lenders gets more business from the same customer and that customer leaves happy, which prompts him or her to tell others about their lender.

Q: When lenders ask about the ROI associated with migrating to COP, what do you tell them?

MARK DEESE: It’s one system to manage and maintain. Why is that important? You’re reducing your IT costs out of the gate. We’re finalizing a project on our side with some of our live customers that did a comparison of their prior LOS to COP. We are asking them: Where’s your time and cost savings? What systems did you eliminate that you were using prior? We’re hoping to have those results before the end of the year. So far the results early on have been astronomical. It’s unbelievable to be able to share that real ROI with the industry.

Q: As lenders look to get more purchase business, how can COP help them capture that business?

MARK DEESE: When we think of cross sales, a lot of times the lender is focused in on that one opportunity, but COP gives the users the ability to add on top of that, to add that second loan on top of a first, or maybe a home-equity loan, or a line of credit on top of a mortgage, or whatever. So, COP helps expand on any lender’s current portfolio. In the end, the system turns shoppers into buyers. And we’re not just talking about expanding a lender’s purchase business, we’re talking about expanding every business channel that lender has.

Q: How would you define an innovative LOS?

MARK DEESE: You have to be able to take things like maintenance, support and configuration and make it easy. A system that is able to be aligned with the lender’s business unit, but at the same time breaks down those walls within most financial institutions is innovative. If you are looking for a loan and you already have a mortgage with that company, you should get a streamlined process and the person you’re dealing with should know you. Innovative technology helps lenders achieve this type of process. When you get instantly approved for a home equity loan from your existing lender and they tell you once you apply, “Hello Mr. Smith, thank you for coming back to us. You’ve been approved and we can close immediately” that turns your bank into your hero.

Q: Why would you say that COP represents the LOS of the future?

MARK DEESE: In strategic business development here at Lending Solutions our goal is to look to the future, and we are on the leading edge with COP. Clients are asking for one system to manage and maintain. That’s what COP is. Other LOS players may be able to provide a fancy document talking about their system, but when a bank or financial institution gets into the weeds, they see that COP is truly one system of record. No other system can show the same results. Other vendors may be talking about providing one system and they may even be in development, but while that system may be out in four, five or six years, COP is already there.

Industry Predictions

Mark Deese thinks:

1.) We are going to see eight or more final rulings on different regulation changes in the next year or so.

2.) Lenders and vendors will become more comfortable with dealing with a lot of regulatory change.

3.) The way to earn new business will change. Ease of use, ease of maintenance and user experience will drive technology investment.

Insider Profile

Mark Deese is Product Manager for Lending Solutions, Fiserv. He has 10 years of experience working with loan originations and as a lender. He is the Product Manager for the Common Origination Platform in Lending Solutions from Fiserv and demonstrates to others how to replicate best in practice methods in loan origination. Mark has extensive experience; from small community lenders to top ten institutions in the country. Beyond lending, he has a vast understanding of financial institution environments and what is required, day in and day out, in the loan originations market.

Growing a mortgage business is challenging in any climate. Add a contracting market, increased rates, fewer HARP leads and an overabundance of all-cash deals, and it can seem nearly impossible; impossible, that is, unless you plot your growth methodically. I work for a mortgage lender that, despite the perfect storm of growth challenges in the mortgage industry, has grown its footprint, market share and volume over the past year. I would like to share a few tips that have contributed to our success, ones that lenders of all sizes can implement to enhance production and longevity, while also elevating the industry as a whole.

It’s been asked how Freedom Mortgage is managing to grow in this market. First, I’ll say that the type of growth we’re achieving takes concerted effort. You can’t expect to increase market share or volume simply by raising your goals. You need strong leadership and have to be methodical. You have to have a plan. At Freedom Mortgage, our plan focuses on achieving organic growth, as well as growth by establishing new lines of business, acquisition and hiring seasoned executives with track records of building out productive teams.

The Bigger Picture: Corporate Culture

Acquiring mortgage-lending operations and recruiting top-producing originators will prove fruitful only if you maintain the integrity of your acquisitions. If you’re going to maintain or grow production from any new acquisition, you must honor the integrity of retaining employees and customers. You’ll want to keep your team happy and fix any issues fast. Our company is privately held and our culture supports fast decisions and turnarounds. It is a concerted effort to create and maintain a positive company culture so that goals will be met.

Think about the companies you have heard of that place a huge emphasis on work environment and company culture. These companies put a lot of thought into the actual structure of the work environment, such as cubicles or offices. They consider the messages that seating arrangements convey. They have flexible work schedules, fun events, free lunches and even pet-friendly offices.

While I’m certainly not suggesting that mortgage lenders allow employees to bring their pets to work, there are certain basic tenets that can make a huge difference in overall performance. Whether you’re in growth mode, just trying to maintain or looking to get acquired, you’ll be much more successful if you create an employee-centric work environment based on collaboration and communication.

Partnership-Based Collaboration

“Collaboration” is one of those overused words, just like its cousin “teamwork.” At Freedom, we prefer the term “synergy” because we are all connected to all we do. Our mission is to foster home ownership.

For us, synergy is more than departments working together and staff pitching in and helping each other when things get busy. It means a collaborative, partnership-based approach to overseeing, directing and managing. Let me give you an example.

In many companies, when employees miss their goals, they can begin to feel uneasy, as if their job security is at stake. This can cause a reaction ranging from discomfort to out-and-out panic, whether the threat is imagined or real. Although fear of job loss is an understandable response, it is not the healthiest form of motivation.

Happy employees, on the other hand, generate happy customers. If someone is going off-track we want to know why, so that we can fix the issue and fix it fast. At Freedom Mortgage we list top performers and have weekly meetings and quarterly reviews. We also have a mentoring program.

Achieving goals is a matter of making sure everyone has the right type of support. Helping your team to thrive and allowing them to feel heard and supported creates a positive environment that gets transmitted to your customers every time they come in contact with your staff. Partnership-based collaboration between management and staff is one way to boost customer service ratings. Happy customers are repeat customers—and great referral sources, too.

The Obvious Role of Communication

Everyone knows communication is a key component to running a successful business and being a great manager. “Communication” is such a common buzzword that it’s often assumed to just happen. As you grow communication, making sure all team members are on the same page at the same time is a challenge. Our monthly newsletter supports this as do our blog and annual Leadership Conference. Our blog promotes our core values and our key messaging to both our staff and our customers. It covers news about what’s happening at Freedom Mortgage, as well as interesting articles on personal finances, home life, and mortgage market updates. The Conference provides our company with a great way to communicate a broad array of important information to a large group at the same time.

If you truly want to leverage communication, you need to encourage employees to speak up, share information with management and make suggestions. Freedom Mortgage has a suggestion mailbox and all items are reviewed. If you want those happy employees that make happy customers, you’ll need to create an environment where each staff member feels valuable and that his or her voice matters.

The same applies to the customer. At Freedom Mortgage, part of our growth plan involves building a reputation that encourages customer loyalty. We want to build a reputation that speaks for us, even when we’re not there. We stay connected to the community through Twitter, Facebook, and LinkedIn, which we use to further promote our message of fostering homeownership. Don’t randomly post information on social media platforms. Your company should have a clear cut message and protocol regarding the types of information to post online.

We also have a formal program for direct communication. We need to make sure that customers are receiving information not only in a compliant fashion, but also in a way that aligns with our brand and image. For us, that means being active listeners. It’s not just about providing the right answers; it’s about asking the right questions.

Any individual who has contact with borrowers should understand the company’s guidelines for customer care. They should follow processes based on listening and gathering information. In our business, the first line of contact for most customers is the loan officer. Your loan officers are essentially your ambassadors to the Realtor®, builder, and homeowner communities. If their communication is great, your reputation will follow. Loan officers play a major role in the way your company is perceived.

Stay in close and supportive contact. Make sure your loan officers are properly trained and that each projects a professional image. Teach them how to be compliant in their communications with borrowers. When borrowers feel heard, and when they’re involved in their mortgage transactions, client satisfaction increases. When client satisfaction increases, so do repeat business and referrals.

For those who think that ongoing training and reminders are a tedious waste of time, remember that repetitive actions tend to foster robotic performance. We like to remind our loan officers that each borrower is different, so we need to stay engaged as active listeners. We need to have the unique conversations that give borrowers a high quality, personalized experience.

An Inside Job

The foundation for sustained success is an inside job. In this climate of contracting volume and increasing regulations, most mortgage lenders conduct business in reactive mode. I’m not going to sugarcoat my experience: While it’s not impossible to expand while using a reactionary approach to business, it’s unlikely that you’ll achieve marked growth, if at all, particularly in today’s contracting, highly regulated market.

We have a proven formula for success. It requires a concerted effort to change an entire corporate culture to include partnership-based collaboration and dynamic, two-way communication. It is by no means a small task, but is one that yields results, produces happier employees and customers, and promotes longevity, year after year.

About The Author

Donald Hard is Senior Vice President, Retail Business Development for Freedom Mortgage, where he oversees the expansion of the company’s national retail business focusing on organic growth. A well respected industry veteran, Donald Hard has over 20 years of mortgage lending experience, which includes 15 years in executive level mortgage sales management.

New business is the lifeblood of the mortgage industry. If an organization is not actively seeking new business prospects, they are preparing to fail. A lender’s database may be teeming with potential customers but organizations often do not know how to effectively market to them.

There are several CRM processes originators can use to more effectively transform leads into customers. First, mortgage firms need to make sure their CRM database is consistently updated with new prospect leads. Upon meeting a new prospect, lenders should add the prospect’s contact information so marketing campaigns can begin immediately. This is the best way to guarantee the lender remains in the front of the prospect’s mind. Next, originators should ensure the marketing campaigns are relevant to each prospect. Many make the mistake of sending the same generic materials to their entire database of prospects. These mass marketing techniques do not give potential customers a clear reason to work with an organization and may suggest the lender does not fully understand their needs. There is a small window of time to capitalize on a connection with a prospect, and one-to-one marketing that produces relevant, timely and strategic communication make it clear why a lender’s offerings meet customers’ needs and why it is a perfect time to engage.

Originators can execute one-to-one marketing programs, which customizes marketing messages to the individual recipient, improving response rates and results, by utilizing Big Data. For example, if interest rates drop, anyone paying a higher rate on a home loan is a viable prospect and may be very open to an offer to refinance. Modern CRM techniques like this offer more relevant and targeted marketing capabilities by organizing Big Data in a sophisticated way that is actionable and relevant. Outdated mass marketing techniques do not provide the same level of results despite their popularity among some lenders.

After the engagement with a prospect is complete, another important element of converting prospects to customers that originators often miss is a reporting and analysis component. Most lenders know what they are trying to accomplish, they just don’t know how to accurately measure the success of a marketing strategy. Conversion rates and clear reporting will show the impact of marketing programs. Incomplete CRM and mass marketing systems provide reporting on the number of marketing materials sent. A TRUE CRM system provides specific metrics identifying the return-on-investment for each marketing piece sent, and how these results compare to peers and contribute to internal goals. This capability enables mortgage companies to modify their existing marketing programs to achieve greater results.

How lenders can gain new business is not a secret. Modern CRM systems utilizing customized and relevant marketing and a comprehensive analysis of the results is a competitive edge that enables mortgage firms to gain market share against old-fashioned competitors who are using outdated marketing systems.

About The Author

Jim Blatt is the CEO and co-founder of St. Louis-based Mortgage Returns, a provider of database-driven, automated marketing solutions for the mortgage industry. For more information, please visit www.mortgagereturns.com.

The residential real estate finance industry has struggled with ‘e’ for years. Efforts to move from paper introduced microfilm, microfiche, imaging, Optical Character Recognition, (OCR) and scanning. All come with their own cost, infrastructure, deployment, storage, retrieval and indexing headaches. This was further complicated with the introduction of an ‘e’ or digital signature component. Everyone understood the benefits of ‘e’, but this type of process change was going to require resource and time investments allocated at a cost to more immediate wants and needs. For the interim,‘e’ would wait.

When the E-Sign Act was signed by President Clinton in 2000, the real estate industry didn’t take much notice. There really wasn’t any reason to modify existing processes and frankly mainstream technology wasn’t available to institute ‘e’ save for the memorialization of a signature in an e-mail. The industry has danced with some ‘e’ success, e-disclosures (boiled down pdf documents sent through e-mail, i.e. ‘paperless’), evolving to attestation of those documents through a signing room where the recipient stumbles through an authentication process, to ‘sign’ the documents, which are then delivered back to a ‘eVault’ for storage, which can be retrieved as .pdf documents.

There has been success in delivering eNotes electronically, with little enthusiasm. To date 321,559 e-Notes have been registered and delivered electronically to the investor. The adoption of ‘e’ has been lethargic at best, but in reality pathetic. ‘e’ will shortly become the required standard and best practice, because drivers are in place to force the process change. They may look like the same old drivers the mortgage industry has been marching to over the years. But the reasons and structure are changed.

There are three drivers, which will force the industry to move to a fully enabled ‘e’ transactions, from the purchase of a home to the delivery of the collateral to the secondary market. Yes, I said Home Purchase to Delivery. What does purchasing a home have to do with collateral delivery? Financing. It is the contention of the author that ‘e’ starts at the beginning and the beginning is different for purchase and refinance transactions.

>> Fraud – Fraud breeds regulation. Each iteration of regulation begets more data to combat fraud. These two components ultimately force the industry to adapt rigor which guarantees transactions, ‘are what they are’. The industry needs to provide sustainable, accurate and verifiable data elements, end to end, from the inception of the transaction; regardless where that is, purchase or refinance to delivery.

>> Audience – As we move from the Greatest Generation through the Baby Boomers. The X and Y Gens occupy the market place, they are tech centric and their culture is to obsolete ideas over and over.

>> Technology – Those partners who deliver the most user friendly, least obtrusive, e-solution will gain the most acceptance, faster.

Looking at each of these in more detail.

Fraud

Data is the driver behind each real estate finance transaction. Looking at a purchase transaction. Nearly 70% of the data elements populated on the Universial Residential Loan Application (Form 1003) are collected either when the property is listed for sale or when the purchase and sales agreement is executed. In a purchase transaction the data between those data sources need to be combined and transferred to the lenders origination system electronically. Obviously a refinance tranasaction is working with a more abbreviated data set, but the utility and process are the same.

The real estate finance industry has compiled a comprehensive data dictionary with the development and revision of the MISMO data set. This standard is the vehicle to share and transfer common data elements through out the loan process. Unfortunately the standardization of data elements and attributes is not currently available from the multitude of listing services used by the real estate industry. In a perfect world the data elements in a purchase transaction would be directed from the Realtor® to the lender, eliminating rekeying of the data into a website or the loan origination system. The present process of delivering a paper copy, minus the listing data to the lender, generates friction in the transaction and potentially opens a window for fraud. Everyone acknowledges best practice moving data electronically is faster, more efficent and elements errors.

Traditional data delivery does not look beyond their own vertical silo. The real estate finance and real estate industries understand the benefits of communication and collaboration to close a transaction. However, they are reading from two different books. Both of these industries continue down the same process happy path that has worked the last forty plus years. This is expensive, inefficent, inaccurate and easy to fraud. The fork in the road of traditional data aggregation and management is coming, and while the players may not surprise you, they likely won’t be your traditional technology solution providers.

Touch points need to be reduced to improve data integrity, speed up delivery and drive down the cost of the process. In essence much of the groundwork is done, the data set needs to be more robust and delivered in a standard format (MISMO), providing accurate, verifiable and auditable data file.

This data set follows the life cycle of the loan rendering, (view) when needed, in the appropriate document. Once the data is compiled it can be parsed to render the appropriate data fields for the particular document in a browser. Indeed the basic premise of the SMART doc® is data that appears in a browser as it would if you were completing a paper document. Changes to the data are date & time stamped, tracked and logged in a history file. As the transaction moves through the process certain fields become locked, and once the loan is eSigned and closed the transaction is then securely locked down and wrapped with a tamper evident seal to prevent further changes.

Funding generates the data file necessary to deliver the collateral to the investor, at a minimum the e-Note. Since nothing is printed to paper it can’t be altered or lost. Based on the users credentials anyone who is authorized to view any part of the transaction renders the document in a secure browser.

Audience

X + Y = ‘e’

The above equation can be confusing; I struggled with math. I attribute part of the problem to the guy who sat next to me in math class during high school. Had he applied himself more I would have done better. However this isn’t about math.

The audience is all ready engaged and will require the shortest learning curve, while being the quickest to adapt. The X and Y generation are the people that will to force the ‘e’ solution. They are tech savay, multitask endlessly, pay their bills electronically, have documents stored in the cloud and don’t do paper. The current generation is of age and wants stuff pushed to their Smartphone or tablet. They will execute their loan documents at 11:30 pm on Sunday. ‘e’ – Really.

Audience and Fraud are the two largest drivers that will compel the industry to move to ‘e’ quickly. The provider who implements smoothest ride to ‘e’ will win. Technology is the vehicle which enables lenders to remain competitive and differeniate from their peers. Lenders will naturally gravitate to the providers making it easiest to do business for them and their borrowers. Those providers who deliver the best solution; stable, secure and easy will be in a strong position when it comes to market share.

Technology

The mortgage and mortgage technology industry has never been willing to truly address the process and technology investment to fully move to ‘e’. There have been gallant attempts by various players to provide a solution, but when the rubber meets the road; roadblocks allowed for a minimalist solution. Counties won’t accept electronic documents, lack of an e-notary, non-acceptance by investors, HUD or the IRS, security; cost to implement, the list goes on. The roadblocks are down, all the reasons the industry has had about investing in ‘e’ are gone. E-Sign Act is law, 4506T has been accepted, lenders accept it, the GSE’s accept it, 1,096 counties currently accept ‘e’ representing over 65% of total transactions, e-notary is live and supported. Technology exists today to support all, but it is not convenient, efficient or friendly.

The pieces are in place for an end to end ‘e’ delivery. New solutions that tightly integrate process provides low hanging fruit for those companies that recognize opportunity. It is not inconceiveable those solutions can be delivered from technologists not in or fringe players in the industry today. These companies are not hampered with, ‘what is, or what was’, engrained process. They look through the glass with the design to introduce a totally new, comfortable, friendly experience. It is easy to imagine and not difficult to implement. Efficient data aggregators, outside of the traditional industry will recognize the opportunity and capitalize on it.

Nontraditional technology vendors have a clean slate on which to start. They are not saddled with legacy baggage. Regardless of the industry they invent, or recreate, they have the culture to obsolete existing ideas quickly. They have shown the willingness to spend big money to enhance earnings and market share. An ‘e’ document and digital signing offering, with high transaction volume and steady reoccurring revenue is attractive to any company that is willing to buy the ticket and take the ride.

The prospect of companies more effiecient in data aggregation, storage and mining, which already have tremendous stores of personal and property information moving into an ‘e’ vertical integrated with a lender shouldn’t be discounted. There isn’t any need to develop an application to manage loan origination. Data feeds throughout the process could interface with many existing origination systems real time. The complexity that state, federal and investor regulations bring as it applies to document availability, validating calculations, notification and presentment, can be solved easily with the acquisition of a document services company.

All of the roadblocks to a succesful ‘e’ process have been removed, with the exception of a well defined end to end solution. The solution needs to be a seamless; not cobbled together with disparate technologies, (loan origination system, document service, notary, title & closing agent system). It needs to be complete, functional, conveinent, user friendly.

Introduction of technology which provides a well choreagraphed, secure, easy to use solution for both the lender and borrower is the last barrier to gaining acceptance, thereby distinquishing lenders above others and establishing that competitive edge. When these standards are met acceptance is broader and confidence in the process is stronger. The question is will the road be paved by the existing mortgage technology providers or will they become speed bumps, as other non traditional providers develop a better solution.

About The Author

Alan Harris is the founder of IRIS Corporation and is a designated Certified Mortgage Banker, (CMB), with 25+ years’ experience in the real estate finance industry. He started in loan origination, servicing operations and system administration. Subsequently moving to Change Management, Process Re-engineering, System Integration and ‘e’ Implementation. Alan has ‘backend’ and/or User Interface ‘hands-on’ experience with the many Loan Origination and leading Servicing systems, managing integration or implementation of those platforms.

I have a confession to make: I love HGTV, the cable television channel devoted to people buying, renovating and flipping houses. I find the network’s programs to be entertaining, and I enjoy watching pleasant people achieve a degree of happiness in their housing choices. (I also have a bit of a crush on Hilary Farr, the stylish host of “Love It or List It,” but I will save the details of that mild obsession for another article.)

However, I need to admit that HGTV has a somewhat puerile notion of how the housing market works. There is plenty of focus on granite countertops and open concept living spaces, but there is very little detail on what is required to purchase a home – and there is even less on the financial responsibility in maintaining payments on a home loan.

In view of this deficit of programming on the true nature of housing finance, I would like to propose a cable network that focuses exclusively on the subject. And in consideration of the programming trends that dominate today’s TV landscape, I believe that this new network’s line-up should be packed with reality television, competition game shows and celebrity worship.

With that in mind, I am proud to present the debut programming of the new Housing Finance TV Network:

Did You Read the Loan Documents?: Remember all of those wacky people in 2008 that claimed they were duped into signing mortgage documents they didn’t understand? Well, in this game show, prospective homebuyers are quizzed on how well they understand the mortgage paperwork that accompanies their loan transaction. Game winners get to sign their loan documents and receive their financing, while losers get a complimentary copy of Elizabeth Warren’s new self-serving autobiography.

Edifice Wrecks: In this game show, deadbeat borrowers awaiting eviction for nonpayment of their mortgages come up with ingenious ways to destroy their properties before they have to remove themselves from the premises. From cement in the drains to sledgehammers in the walls, it is demolition derby at home – and the winners are rewarded for the most creative forms of destruction to the property that is no longer owned by them. (This could also double as educational programming because it would offer a view of homeownership that the certain regulators and politicians and their apologists in the mainstream media never acknowledge.)

The New Mission Impossible: In this reality series, we ride along with extraordinary business professionals on multiple missions: they hunt down elusive characters that absconded with other people’s money, help bring comfort and support to emotionally and financially frayed, and ensure that people will not be forced out of their homes. All of this occurs while they are under vicious attack from the media, regulators and self-proclaimed consumer advocates. Yeah, you guessed it – this is a show about the daily work of mortgage servicers.

Law and Order – The Mortgage Fraud Files: This true-crime series puts a spotlight on how mortgage fraud continues to create billions of dollars of damage to the economy and how federal law enforcement is trying to stop this lethal disruption. But truth be told, we’re afraid that this series probably won’t last very long: according to a recent report by the Department of Justice’s Inspector Journal, the FBI has put mortgage fraud investigations near the bottom of its list of priorities. And, hey, you can’t have a true-crime series if the law enforcement agents can’t be bothered to fight the crimes in question.

Golfing with Angelo Mozilo: The man with the tan and the great deadpan is back, and this time he is cruising the country clubs of the world in pursuit of the perfect 18-hole game. Guest stars include some of the most notable Friends of Angelo – including Chris Dodd, the former Senate Banking Committee chairman – for a glimpse into the ex-Countrywide leader’s champagne and caviar life. (We were planning a program about how Eric Holder’s Justice Department successfully indicted and convicted the Wall Street executives at the heart of the 2008 crash, but that type of fantasy show would be better on the SyFy network instead.)

Secrets of the CFPB: In this history/adventure series, we attempt to take the viewer where no cameras have ever been before: inside a CFPB Advisory Council Meeting. And if you thought those zany Freemasons were aggressive in guarding their mysteries, wait until you see the lengths that this regulatory agency goes to ensure that the public, the media and elected officials are kept in the dark!

Keeping Up with the Cordrays: Move over Kim, Khloe and Kourtney! In this reality program, we follow Washington’s highest paid bureaucrat – enjoying a salary greater than Vice President Biden and Supreme Court Chief Justice Roberts – as he finalizes the plans for his new headquarters (designed by the favorite architects of Dubai’s emir), swats off attempts to enable greater transparency at his agency and builds a political foundation on badmouthing the mortgage banking industry. Rumor has it that there might be a mid-season surprise involving a run for the Ohio governor’s position, though we believe that the season might be cancelled in January if the GOP wins control of the House and Senate in November.

About The Author

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.

Let’s continue our conversation about how to better serve the consumer. We recognize that the emergence of consumer influence is impacting all the major industries—automotive, health and financial. The consumer is compelling all of them to look at things different. The need to be proactive rather than reactive is critical to the well-being of all. Innovation and technology should be considered as significant contributing factors. The key question is the following: Does technology drive innovation or is innovation driven by technology? Well, the simple answer is YES on both counts.

In the Automotive Industry, the application of radar, back-up cameras and visual display technology increased the safety factors by allowing the driver to monitor conditions without major adjustments in their line of sight and focus. Like any change, it also introduced new obstacles. The down side is that some drivers are now more distracted by cell phones and texting.

To provide another example, the Health Profession continues to make groundbreaking advancements. I read a recent article about a new tool to help pinpoint strokes. Researchers are developing a new medical instrument to enable paramedics to diagnosis strokes in the ambulance, speeding potentially life-altering treatment. Strokefinder is a helmet-shaped tool that transmits weak microwave signals into the brain to diagnose whether it is a bleeding stroke or a clot-induced stroke. The difference is important. The blood thinning treatment given to victims of a clot-induced stroke to dissolve the blood clots could prove fatal if the victim suffered a bleeding stroke.

If we look closer to home, according to a recent article in the M Report, The National Association of Realtors (NAR) set out to answer a very simple question—how much are Realtors spending on new technology for their businesses? Realtors continued to invest in technology for their business in 2013 and spent more than they had in previous years. “Technology has transformed the way Realtors do business, but in real estate, being high tech can never come at the expense of being highly accessible,” said Mark Lesswing, NAR SVP and chief technology officer. “Advances in Smartphones and social media have made it easier for Realtors to stay in touch with their customers, but maintaining a strong, personal relationship with clients is still at the heart of the business.” NAR’s survey found that 94 percent of Realtors use mobile devices to communicate with clients.

Further, a recent article in my local paper documented how a real estate professional is utilizing some cool technology. Here are some excerpts from their web page: “The Ellis Team is proud to announce a new way to market real estate in SW Florida. Technology has changed the way people view TV shows, movies, and content over the Internet. Today companies like Netflix stream TV shows and movies direct to people’s homes or mobile devices. People’s expectations are changing about how they want content delivered. For the first time the Ellis Team at RE/MAX is bringing cutting edge technology to SW Florida and combining it with High Definition video and studio production editing. Video is 53 times more likely to generate 1st page Google ranking over any other form of content. Video provides a 41% higher click-through rate on universal results pages, and keeps visitors on your websites 6 times longer. 73% of sellers say they are more likely to list with an agent who uses video. However, YouTube is filled with videos shot from cell phone cameras and terrible audio. Consumers expect studio quality video, and when you provide that, companies like Netflix flourish. For more information, please go to (www.homesinhd.tv). This is not a paid commercial.

If we look further at the consumer’s openness to use technology, the way the consumer does banking today is considerably different than in the past. Recently the Housing Wire reported that “Banking relationships traditionally begin with deposit accounts, but changes in retail banking, combined with a sputtering economy and the explosion of new technologies, have spawned a new breed of customers who are focused on transactions first. These transaction-oriented customers tend to be young — under 35 — and seek incremental financial value from everyday purchases and interactions versus traditional banking relationships. This group has never experienced high or even normal interest rates, so deposit accounts mean little to them. They’ve grown up with cards and EFTs, not checks. And the Great Recession limited their demand for mortgages, car loans and other traditional loan products. Even when economic prospects improve and interest rates rise, their entrenched transactional habits may prevent banks from establishing traditional relationships with them.

Enabling technology combined with this new mindset has resulted in an environment where financial services are no longer viewed as something primarily provided by banks, but are just another product to be consumed, oftentimes as part of another service. And for transaction-driven customers, a bank is less likely to be the provider than a retailer, restaurant, or other service company. Banks need to recognize that they are competing against other service providers and reorient themselves to acquire transactions first and deposits second. Bank of America released its inaugural “Trends in Consumer Mobility Report”, which revealed that out of 1,000 U.S. adults, 47% admitted they would not last a day without their smartphone. About 85% of survey respondents check their mobile devices a few times a day, the report concluded. Meanwhile, the survey determined that almost two-thirds (62%) of consumers have tried mobile banking. The most common banking activities people use their smartphones for include monitoring account balances and statements, transferring funds and paying bills, and depositing checks, Bank of America found. Bank of America surpassed 15 million active mobile banking customers in 2014.”

The challenge for technology is how to best enable enhancement and change across the population. There is no doubt the younger population is very tech-savvy. Everything is electronic to them. They will ‘text’ the person next to them rather than carry on a conversation. They post to Facebook and other social media sites so all their “friends” know what they are doing. They spend more time watching YouTube then television. They devour the Internet. There is no doubt that the Internet has changed the way of life for all the generations, but separating fact from fiction is still a challenge.

So what lies ahead for the mortgage industry? In spite of all the trials and tribulations, people still list home ownership as one of their primary goals. If we want to focus on technology, let’s center on how the younger generation might approach buying a home. They don’t buy with the thought that they will live there for the next 30 years. The job market today forces them to be mobile, so they want a home that they can afford but still be able to retain their investment if forced to move. They tend to a lot of research on their own before contacting a real estate agent.

The point that I am trying to make is that the mortgage industry will need to utilize technology in different ways to engage the consumer. We will continue this discussion next month.

About The Author

Roger Gudobba is passionate about the importance of quality data and its role in improving the mortgage process. He is an industry thought leader and chief executive officer at PROGRESS in Lending Association. Roger has over 30 years of mortgage experience and an active participant in the Mortgage Industry Standards Maintenance Organization (MISMO) for 17 years. He was a Mortgage Banking Technology All-Star in 2005. He was the recipient of Mortgage Technology Magazine’s Steve Fraser Visionary Award in 2004 and the Lasting Impact Award in 2008. Roger can be reached at rgudobba@compliancesystems.com.

Today, there are an estimated 25 million mortgages serviced within the U.S. Of these, over 4.5 million are going unpaid, as of October 2013 according to DS News. As the aftermath of the housing crisis draws to a close, there remains a lingering problem many servicers still face: a surge in title issues. This relatively sudden increase is a result of incautious origination practices, rushed refinances, and inadequate title underwriting in the high-volume period politely known as the housing bubble.

According to industry estimates, a solid one-third of insured mortgage loans – meaning those with a lender’s title policy – have some title-integrity issues, however remote. And, it is our experience that between seven to ten percent of most servicing portfolios have what could be categorized as “fairly severe” title or documentation defects, which if left unresolved could result in an uncommon asset or complex curative situation, and significant financial losses.

Traditional Vs. Complex Title Defects

The distinction between routine title issues and what we consider “complex title defects” is drawn on (1) the time and difficulty involved in curing the defect and (2) the severity the defect poses to the subject loan’s security interest. Complex issues generally need to be resolved, or at least closely examined to confirm they pose no genuine threat to the underlying security. However, and not insignificantly, certain investors often contractually hold servicers to higher standards than the industry or even state law demands, turning otherwise routine issues into must-fix situations.

Complex issues are usually comprised of (1) lien position concerns; (2) discrepancies or ambiguities in the property description; (3) breaks in the chain of title and missing interests issues; and (4) other various errors and omissions in the recorded documents (e.g., misspelled names, missing homestead language or witness signatures, defective acknowledgments, etc.).

They are typically, in the average servicing portfolio at least, accounts in the foreclosure process in a “hold” status (alongside active bankruptcies, contested foreclosures, and missing collateral file documents). Such holds generate significant costs to the servicer in the form of compensatory fees and repurchase risk, neither of which are likely to be covered by the title insurance policy. In REO, they may be designated as “unable to market,” which in name alone implies the obvious array of costs.

The Curative Factor

Complex issues need to be resolved, and they need to be resolved quickly. The challenge, of course, is in determining how to do so in a way that’s acceptable for both the servicer and its investors. The traditional approach has been to file a claim pursuant to the title policy and then leave the account in the hands of the insurer. But relying solely on the title insurers for curative efforts far too often results in bloated timelines and, in many cases, insufficient cures.

This is largely because the interests of the title company, and even of retained counsel, are simply misaligned with those of the servicers, even if unintentionally. The title companies’ insistent utilization of indemnity offers, or “Letters of Indemnity,” largely disregarded by certain large institutional investors as unacceptable resolutions, is one illustration. The title company may have legally discharged its obligations under the terms of the policy, but the servicer is, practically speaking, in no better place for it.

Filing suit when certain pre-litigation efforts could more swiftly effectuate a cure is another example. Law firms are unsurprisingly adept at litigation, but they over-leverage it as a result. It is rarely needed in the curative context (though it certainly is sometimes), and the “sue first, settle later” mentality tends to carry with it significant costs to the servicer, in terms of both time and fees but also in the form of reputational risk. And unless the title company can easily fix an issue where an LOI – Letter of Intent or specific documentation – won’t suffice, counsel may be required to be retained.

To be sure, the title insurance industry should play a significant role in the curative process. But as the underwriters bear the weight of the title issue influx, it’s prudent for servicers to be pro-active as well. Shaving off even a month from the average claims processing or curative timeline can generate substantial savings.

A Centralized Solution

Although many complex title defects are somewhat nuanced, a streamlined and analytics-driven “process flow” approach can still be effectively leveraged. Particularly if combined with a pre-litigation focus on outbound settlement efforts and a national legal footprint to allow for a centralized solution, this system can optimize the time- and cost-efficiency typically absent from the traditional model.

The ability to successfully locate and obtain cooperation from necessary parties is critical to the premise, but traditional title shops are staffed with title agents, not skilled call agents and skip-tracers. Traditional law firms similarly tend to be myopic in their approach and in their skill-set. As with the title companies, they do what fits their model. Working with a trusted source specializing in curative title services is essential in resolving documentation defects and avoiding financial losses.

It is increasingly clear that a different structure and a better alignment of interests are necessary for servicers looking to stem costs and compete effectively. Getting away from the passivity of the current philosophy and taking a more hands-on approach is critical.

About The Author

Tom Huddleston serves as senior vice president of Carrington Title Services where he is responsible for managing client relationships, as well as business and strategic development focused on providing real estate and technology solutions within the institutional business channel. With more than 30 years of experience in the financial services industry, Tom possesses an extensive knowledge of all aspects of the real estate continuum, including mortgage lending operations, title and settlement management, default asset management, cash management operations, support services, product development and product management.
Jason Pinson is the founder and CEO of Ursus Holdings LLC, which provides Title Curative Services, Consulting, Analytics and Legal Services to the mortgage servicing Industry. He is a graduate of The University of Tulsa College of Law where he was Editor-in-Chief of The International Law Review, holds an MBA from the University Of Tulsa Graduate School Of Business and is a licensed Texas attorney.

Every leader is looking for the next big thing in their business. More than ever, leaders are looking for answers that represent minimal risk, optimal financial benefit and immediate marketplace impact. Unfortunately, many leaders don’t know where the answers lie, as they are being challenged to find the right solutions for their most pressing needs – quickly.

Because we now operate in a change management infused world, it makes it difficult to identify the right strategies for survival and growth – as we continue to get lost within the demands of business necessity just to stay afloat. We keep solving for problems that could have been avoided if the right strategies had been properly thought out and successfully deployed. As such, we are all experiencing renewal and reinvention in our businesses.

In the article “5 Strategies For Discovering The Next Big Thing In Your Business” by Glenn Llopis, he says, “It’s time to focus our attention on seeing beyond the obvious, and I can’t agree more.”

For example, one thing that has certainly become much more obvious, according to Llopis, is that we operate in a short-term, talent-based, rapid-paced, and trust-demanding world of work that has become more diverse and personally branded than ever before. There are many different types of people, attitudes and demands to serve. Business is becoming increasingly complex during a time when we all seek to simplify it.

Additionally, he says, there is a paradigm shift we are all experiencing. During the pre-2008 recessionary times, an organization and their brands had the power to push (what appeared to be) unlimited budgets that were used to heavily influence employee engagement and consumer demand.

Simply put: That control and balance of power has now shifted.

Survival mode has become the strategy for many businesses that feel the pressure of dealing with the increased costs of both employee and consumer acquisition and retention. Many businesses spend an extraordinary amount of time on satisfying the immediate needs of their employees and consumers to sustain any momentum that remains in sight.

Why? Individuals have much more control over businesses and brands than ever before. Top talent is becoming more difficult to hold onto as the competitive landscape gets stronger and organizations invest less to develop and retain them. Employees have been forced into a position where they must not only manage the brands of the organization they serve – but also their own personal brands.

Equally, with more choices in front of them, consumers have options and more intelligence to make purchasing decisions. Consumers have become much more fragmented and it’s difficult to cast a wide enough net to engage them with a one-size-fits-all approach. The rising popularity of social media and growing community clusters require businesses to have a much deeper relationship with their consumers to earn their trust and loyalty.

With the new realities that companies are being faced with – how do they most effectively course correct? The answers lie right in front of them – they must have a greater strategic focus on maximizing the relationships, skill-sets, competencies, engagement needs, and the know-how that lies within their respective employees and consumers.

To get your journey started in search of the next big thing in your business, Llopis provides five surefire strategies that will help guide you toward the answers you are looking for – by creating a path of momentum and opportunities for growth previously unseen in your organization.

1.) Leadership Must Align with Your Business Model

It’s difficult to see beyond the obvious when an organization’s leadership is not in complete alignment with its business goals and objectives. Many organizations today find themselves at risk with complacent leadership that continues to grow fragmented as business models change and the requirements for success no longer align with the current skill-sets, capabilities and know-how of its leaders.

In his article, Llopis shares that he asked a CEO of a Fortune 150 company to describe the company’s culture in one word. The response, “comfortable.” When he mentioned that comfortable is associated with a high-risk profile, he agreed but didn’t know how to fix the problem. This scenario is more prevalent than many would imagine. The solution is to step-back and recalibrate your leadership team and solidify its identity to assure that it is capable of achieving the mission and vision of the organization – and to assure that all levels of leadership are in equal alignment and supporting one another.

It’s impossible to discover the next big thing for your business when the leadership teams within a company represent disjointed, disparate parts – rather than a convergence of intelligence and know-how that is in sync and strongly interconnected. In the mortgage space you see this a lot. The boom days of sales people just being order-takers are over. Everyone has to fight for every deal these days. However, I’m not sure that mentality has made its way to the top. Too often upper management doesn’t challenge their sales people and they also don’t give them the tools that they need to sell. Times are changing in mortgage lending and the successful company going forward will have tighter teams that are on the same page, helping each other as the situation requires.

2.) Brands Must Focus on Advancing Humanity

Branding has become less about what consumers really need and more about what matters most to brands – and what they think consumers want. With so much competition and the rising cost of consumer acquisition, brands are attempting to hyper-stimulate artificial demand through a flurry of tactics designed to get consumers to pay attention to them. It feels like every day there is a new product or service that a brand is pitching that is the ultimate solution for a particular problem – one that most didn’t even know existed.

Why does every LOS claim to be end-to-end? Because they feel like they have to say that. They feel like that’s what all their competitors say and that’s what lenders want, so they all just adopt that phrase. The problem is that end-to-end loses its meaning and in the end nobody really knows what it means anymore.

Consumers want brands to stop selling them so hard and start educating them on things that matter most to them. Consumers want brands to be more authentic about how they engage with them and allow them to play a more hands-on role in “the next big thing” – rather than feeling that it is being forced upon them.

In the end, brands must focus on advancing humanity by being more socially responsible. Consumers want brands to help them live a better life and increase their quality of living. Consumers, much like corporate leaders in search of the next big thing, simply want brands to focus on the fundamentals of satisfying their hierarchy of needs – rather than trying to sell them something that inflicts fear or feels forced in support of a trend that may come and go in a moment’s notice.

Really, in the end it boils down to return on investment. What’s in it for the lender? There has to be a clear value proposition that goes beyond throwing standard buzzwords out there hoping that something will stick. The selling process needs to be personal and unique to each new client in order for it to result in a sale. If the lender thinks that you’re reading off of a script, I doubt that you’re going to get the sale.

Next month, I’ll give you three more tips on how you can find the next big thing for your business, so stay tuned …

About The Author

Michael Hammond is chief strategy officer at PROGRESS in Lending Association and is the founder and president of NexLevel Advisors. They provide solutions in business development, strategic selling, marketing, public relations and social media. He has close to two decades of leadership, management, marketing, sales and technical product experience. Michael held prior executive positions such as CEO, CMO, VP of Business Strategy, Director of Sales and Marketing and Director of Marketing for a number of leading companies. He is also only one of about 60 individuals to earn the Certified Mortgage Technologist (CMT) designation. Michael can be contacted via e-mail at mhammond@nexleveladvisors.com.

These days lenders just can’t afford to get it wrong. Big brother is watching. There are too many new rules that are hitting the mortgage industry, and regulators are keeping a close eye on what lenders are doing.

For example, with heightened regulatory and media focus on Home Mortgage Disclosure Act (HMDA) data, more lenders will find themselves the subject of fair lending exams, according to Mortgage TrueView, a provider of data-driven business intelligence services. In a new independent study, the company found that many lenders are leaving themselves vulnerable to fair lending exams and significant penalties by not properly monitoring and managing HMDA reporting.

Mortgage companies and banks are not taking full advantage of the insights offered in HMDA data, said Mortgage TrueView President and CEO David Moffat. Additionally, Moffat said the company’s 2013 HMDA survey showed that many lenders are submitting their data with formatting errors, which could lead to non-compliance issues with regulators.

Specifically, the HMDA Survey and Case Study, Volume II: 2013 HMDA Data Insights details Mortgage TrueView’s findings based on 2013 HMDA date collected from nearly 400 of the country’s lenders, including seven of the top 10 lenders and 15 of the top 20 lenders.

>> Denial rates for white applicants increased from 17% to 21%, while denial rates for non-white applicants increased from 23% to 28%

>> Denial rates for Hispanics increased from 25% to 30%. Denial rates for non-Hispanics increased from 18% to 21%

>> Denial rates for female applicants increased from 21% to 26%. Denial rates for males increased from 17% to 21%

For its survey, Mortgage TrueView requested the 2013 public loan application register (LAR) filings from the top 1,160 mortgage originators in the country. Notably, Mortgage TrueView found that a sizable number of the 388 respondents had critical errors in their filings, including missing data fields, incomplete data fields, incomplete records and incorrect data formats.

Another area of mortgage lending that is under increase scrutiny is the appraisal space, and lenders aren’t getting it right in some cases. “When lenders try to do their own appraisal assignments, they end up getting the wrong appraiser matched to the wrong property in some occasions,” said Alice Sorenson, Chief Investment Officer of LRES. “As a result, you end up with an appraiser who is asking more questions than should necessarily be needed, and the lender ends up with a longer turnaround time, which prolongs their ability to generate the loan.

“Lenders also use appraiser trainees or may not recognize when an appraiser trainee is being used by an appraiser. Why is that important? Depending on how well that trainee is supervised, it will drive the quality of the information that is put into an appraisal and then the lender could end up with a bad appraisal if that appraiser doesn’t catch the trainee’s error or if a lender doesn’t have the audit capability to perform and confirm that all compliance issues are being followed. I’d say that insufficient oversight is one of the biggest causes of lenders increased costs and ultimately, of course, consumer cost,” Sorenson pointed out.

LRES is a national provider of commercial and residential valuations and asset management for the mortgage, banking, credit union and real estate industries. Earlier in the year the company upgraded its DirectConnect framework, which enables a user’s technology to seamlessly connect with the LRES LINK proprietary order management platform to optimize and accelerate the valuation ordering process.

The latest version of LRES DirectConnect reduces the time for successful systems integration from 4-6 months down to 2-4 weeks. This release is flexible enough to connect any financial institution to any third party provider of appraisal and property valuation services. It also provides users collateral valuation reports as well as the supporting data in the MISMO industry-standard format.

Other industry players like Advantage Systems, agree that some lenders are not paying close enough attention to simple processes to ensure total compliance in all cases. “The right procedures have to be in place to make sure that these amounts for paying appraisers, or any reimbursables, are captured quickly and that they have the right technology in place to make sure that they’re seeing when these things are coming up,” noted Brian D. Lynch, the Founder and President of Advantage Systems. “So, being able to look at a report quickly and see who’s behind in their payment or whatever, so that you can take care of it quickly is essential.”

Advantage Systems is a provider of accounting and contract management tools for the mortgage banking and real estate development industries. Last year the company noticed a 20% increase in sales for its Commission Calculator Module. The Commission Calculation Module enables lenders to automate the calculation of commissions and bonuses in both retail and wholesale environments and utilizes the loan-level accounting capability of AMB software to minimize user input and increase accuracy. This eliminates the time and cost associated with manually calculating commissions. The technology enables users to set up commission calculations by loan officer and loan type as well as calculate bonuses monthly, quarterly or annually.Lenders can also choose to implement Advantage Systems’ web-based Loan Officer Reporting Module, which gives loan officers the ability to access their commission reports using an Internet connection.

“Lenders need to isolate their pain points and put the proper procedures and technology in place to eliminate errors. You can’t just throw spreadsheets and bodies at it these days,” said Lynch.

In general, according to Greg Marek, Chief Marketing Officer of Capsilon, the industry has a data integrity issue. “The most common types of errors that we’re seeing really all point back to data integrity or data quality. Lenders are making underwriting decisions and investors are making loan purchase decisions based on information that is, in many cases, out of date.”

How does this happen? Marek says that some times underwriters rush it to clear the pipeline. “Underwriters are not necessarily doing the type of rigorous audits that they need to do on the loan file before they underwrite or sell to an investor. One specific example of how this happens is they may be using expired documentation to make underwriting decisions, so the borrower may be providing investment statements or bank statements that are stale. The documentation is outside the window according to the lender’s guidelines, but there’s no time to get the right documents, so someone might not have verified the date, and therefore they’re making calculations based on data provided that may or may not be as accurate as it could be.”

To this end, Capsilon, a provider of document imaging for mortgage lenders and investors, released a Network Delivery capability, which enables users to deliver secure and compliant loan packages to leading GSEs and financial institutions. Users of Capsilon’s DocVelocity product can now deliver a single or group of loan packages for batch delivery to seven flagship institutions. Four supported major investor institutions include Chase, Citibank, Flagstar Bank and Wells Fargo Bank. Three supported government institutions include Fannie Mae, Freddie Mac and the Federal Housing Authority. With a single click, loans are sent directly to these institutions according to their prescribed formats and protocols. DocVelocity’s quality control features provide more efficient selection, mapping, translation and tracking of mortgage documents to ensure accurate and on-time delivery of quality loan packages. Using DocVelocity delivery, the correct documents are selected, properly named and reflect the desired stacking order.

The bottom line is that every area of a lender’s business has to be more controlled, even marketing, says Jim Blatt, CEO of CRM provider Mortgage Returns. “Given the amount of regulation that applies to how disclosures are made, what type of marketing and advertising is permissible and what isn’t, sharing of fees among clients with RESPA or sharing value of cobranded advertising, lenders have to have a tightly controlled marketing system, where everything is centralized and locked down. We see almost all of the good lending companies trying to consolidate marketing activities to control them better, and those that are not taking those actions are certainly putting themselves in a scary spot.”

Really any lender that is not relying more on technology to eliminate errors around things like appraisals, data integrity, marketing and a host of other functions is choosing to do so at their own risk.

About The Author

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Is balancing work and life bunk? Work-Life Balance means having enough time, energy and resources for those things that matter most. The importance of balancing the relationship between work and private life must never be underestimated, particularly as it involves not just the individual, but also his or her family and friends. More and more companies see the value in creating corporate wellness programs, which have become more mainstream and include educating company employees through workshops on balancing work and life, which impacts the importance of managing stress.

Women typically embrace the need to work on balancing their lives more than men, especially those who work and have families. Now Generation X and Generation Y men are asking their employers for guidance, action and tapping flexible-workplace policies designed for working mothers according to the Wall Street Journal entitled “The Daddy Juggle: Work, Life, Family and Chaos.” The article goes on to say that some men are curbing their career goals to spend more time at home. Employers have been slow to recognize men’s role as caregivers and fathers. As a younger generation brings new expectations for fatherhood into the office, they will have to challenge an assumption their female colleagues have faced for years: It is impossible to be both an involved parent and a star performer. Younger generation males are redefining what it means to be a dad. Ellen Galinsky, President of Families and Work Institute shared in the article that the number of U.S. employers taking extra steps to listen to what working dads need is quite small at this point. But their ranks will likely increase especially as young fathers become more assertive in their needs.

In the first part of June, the White House held a summit on working fathers. NPR Code Switch publication said this is another sign of just how much modern fatherhood is changing as the number of stay-at-home dads in the United States has doubled since 1989 and is now around 2.2 million. Pew Research Center found that a quarter of stay-at-home fathers said they choose to stay at home with their children. A similar number said they were at home due to illness and another similar number consisted of fathers with disabilities or who were unable to find work. Fathers who are actively involved in child-rearing regardless of their individual situation are still not a common practice.

Blogger, Richard Doyin became an overnight sensation when he posted a photo online with his blog while on paternity leave from his corporate job. What he thought was an innocuous photo of his interaction and caregiving with his two daughters became an instant hit. While his motive was rather self-serving because he wanted to prove to his skeptical wife that he could do it, the photo was shared by tens of thousands of people and he was inundated with responses from varying perspectives. Some people thought he was one of the “greatest dads.” Other people pointed that the mothers do this every day, and if you saw a woman doing this, it wouldn’t be considered such a worthy endeavor. But there was other responses from people who had their core beliefs shattered – “this guy seems pretty cool, he’s black and loves his kids. What’s going on?” Richard’s wants his conversations through blogs to start from the position that dads like him, black or otherwise are not aberrations. “My issue is that I want it to be a discussion about modern fatherhood where it’s OK for men to behave the way I’m behaving as far as caring for their kids,” he said. “It’s not unusual.”

A study by Boston College for Work & Family found that a majority of fathers (especially those under 40), are moving away from the traditional “breadwinner” role and see themselves as responsible for both the emotional and financial needs of their children. The study found that “Based on what fathers are telling us, it’s clear that they carry an appreciation of the important role that fatherhood plays in their lives and the lives of their family members. From our research, we see American men who are striving to be good workers, good fathers, and good men.”

The idea of fathers taking an active role in raising their children is not necessarily new. Older fathers, of which there are many more these days, have always had the opportunity to actively participate in the “fatherhood” experience. Everyone probably knows a man who has or wants more responsibility for their home and children. Take my son-in-law for example. He is a firefighter and because of his schedule he is home on a regular basis. When he first started in this job, he assumed that he should be working a second job, since that is what “men” do. However, it soon became apparent that the best thing he could do for the kids and the family’s financial health was to stop paying a nanny and take on those responsibilities himself. He does find that many times he will be the only father on play dates or at the daisy scout meeting, but the reward of being more involved with family and community more than compensates for any funny looks.

Of course, there is the fear that reducing time at the office will dead-end careers. Stew Friedman, a management professor and head of Work/Life Integration Project at the University of Pennsylvania’s Wharton School shared that there is a lot of confusion and angst among young men on how they’re going to make it work. There is also a stigma working against men that those who identify themselves as active fathers are unwilling to work hard or put the company first. (Does this sound familiar to our female readers?) Typically men in traditional breadwinner roles are rewarded either because of cultural assumptions or because they are able to put their work first while men who act as caregivers are hurt for doing so.

“Employers still tend to promote people who appear willing to sacrifice everything for their careers,” says Jessica DeGroot, founder of ThirdPath Institute, an organization that advocates better work-life policies. Most current leaders are from the “Baby Boom” generation and rose to the top under the old rules, which shapes their thinking about what it takes to succeed. This is especially true in the mortgage industry where most leaders of companies are typically older Baby Boomers who still lead from the “top down” and resist change. How are these current leaders going to embrace the younger generation of males who “work to live” vs. “live to work”? Obviously this approach will have to change as new, younger leaders, both men and women advance in their careers. “This new breed of leadership will turn down promotions or curb their ambitions without greater support for their parenting roles,” says Brad Harrington of the Boston College Center for Work & Family.

The study at Boston College also found that the more supportive fathers perceive their work environments to be better overall based on the lower level of work-to-family conflict and the higher the level of work-to-family enrichment they experience because of their attention to balancing their work and families. Ultimately this demonstrates that a more supportive work culture has a positive effect on a father’s home life and vice versa.

The changes that are taking place with fathers have not been fully understood and embraced within organizations, and old paradigms persist. Work-life balance continues to be seen as mainly a women’s issue. Fathers are expected to work long hours and to put their work lives ahead of their family lives. Unfortunately there is a deeply ingrained belief that working more hours leads to higher productivity and more effective workers. What it often fails to consider are the costs of added employee stress, lower morale, low job satisfaction and lower employee engagement, which ultimately leads to a decrease in productivity in those extra hours spent at the office instead of at home. Regardless of views on longer work hours and productivity, it is clear that roles of both men and women are changing. Women are taking a larger role at work and will continue to do so. Fathers are taking a larger role at home and that trend will also continue.

Whether you are well established in a positive work-life balance or just interested in getting your company to begin thinking this way there are some ideas available for consideration. The Enterprise-For-Health organization suggests some work-life balance activities such as:

>> Flexible working hours

>> Flexible place of work (telecommuting, working from home)

>> Flexible design of work processes and work content (teams working together, job sharing, job rotation)

>> Provision of financial and social support (providing child-care, care arrangements for child and eldercare, child-care bonus allowances, concierge services)

Some companies that have embraced the possibility of this new working place movement include Ford Motor Company who allows salaried U.S. employees to work a reduced schedule. MetLife has a virtual coaching program for expecting parents. Ernst & Young LLP offers a similar program, which was for women only until a female officer suggested offering to men as well. American Express holds occasional Fatherhood Breakfast Series where they invite male colleagues to talk about blending career and family. Google and Zappos have embraced blending work, play and balance into their cultures for years.

The companies who recognize and respect the need of their employees at different stages in life are best positioned and prepared to meet the challenges of the changing world of work. Being out of balance between work and life leads to employees experiencing very specific stressful situations with negative health consequences. Ignoring this can reflect on the success of an employer as well. Companies need to find ways to support all types of family arrangements and provide the flexibility needed to make both the companies and the employees successful. Those that do this will have access to the best talent pool, and potentially a very productive and engaged workplace, even if you happen to be a mortgage company.

About The Author

Rebecca Walzak is a 32 year veteran and Industry Expert on Operational Risk Management and Organizational Control. She is a leader in developing Operational and Control automated assessments for lenders, rating agencies and investors. Walzak has expert knowledge in all areas of the mortgage industry including production, servicing and secondary.
Barbara Perino is a Certified Professional Co-Active Coach guiding her clients who are executive leaders and their staff. Barbara has been trained through The Coach Training Institute (CTI) located in San Rafael, CA. She completed a Coaching Certification Program through CTI and the International Coaching Federation (ICF). Prior to becoming a coach, Barbara was a 16-year veteran of the residential mortgage industry.